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Rio Tinto's Oyu Tolgoi mine faces new audit claiming unpaid taxes, penalties

  • Rio Tinto's (RIO +1.8%) $6.2B Oyu Tolgoi copper and gold project in Mongolia hits another snag, as Turquoise Hill Resources (TRQ -4.1%), the Rio-owned mining company that owns the rights to the mine, is handed a new audit claiming unpaid taxes and penalties.
  • TRQ says it disputes the government's claims and that a failure to resolve the issue before the end of the month could jeopardize the mine's next phase of development.
  • RIO and TRQ say they may consider taking Mongolia to international arbitration if they decide the new tax claim amounts to a breach of their investment agreement.
Comments (5)
  • lsuavecito
    , contributor
    Comments (464) | Send Message
     
    A never ending story, this is what happens when a company is coerced to deal with 4th world autocRats. FCX is in the same boat.
    23 Jun, 02:08 PM Reply Like
  • marpy
    , contributor
    Comments (801) | Send Message
     
    Nothing new here - you have a corrupt nationalistic GOM that is always looking for more as they keep driving their economy into the ground. Rio Tinto knows this game well as they operate in many similar countries and so will not be bullied by these clowns. The investment agreement that includes tax stablization is enforceable in world courts (a must have when doing business in a place like Mongolia as their courts are a joke) and the GOM does not have much of a leg to stand on here. The next election is in 2016 and chances are that this government will be history as the prior government was far more pro business and the people are taking an economic beating over the policies of the current government.
    23 Jun, 06:10 PM Reply Like
  • formichinoo
    , contributor
    Comment (1) | Send Message
     
    The Mongolian government has shot itself in the foot yet again, it is these sort of capers that will make investors think twice, yet another reason for Mongolia's currency to further nosedive, that is fine for me as I live there and my income is from the UK, it is like getting a pay rise each month!
    23 Jun, 10:46 PM Reply Like
  • A.tom
    , contributor
    Comments (8) | Send Message
     
    Given GOM loss to Khan Resources in international arbitration, hopefully the threat of more proceedings is enough to force a resolution.

     

    I really don't understand this claim by the govt. They borrowed $250million from OT a few years back (which was wasted on handouts to the populace) and have yet to pay anything back. Why not let the company get it back through tax deductions? It's becoming apparent that nothing is going to proceed with TRQ until after the next election in 2016.
    26 Jun, 04:16 AM Reply Like
  • mines2013
    , contributor
    Comment (1) | Send Message
     
    Great opportunity for UN/WTO to finally earn some actual respect for a change by negotiating realistically with 4th world corrupt ripoff govt.'s like GOM who rapaciously are out to steal more & more from pragmatic global corp. JV's on their existing agreements in place..Why bother entering into these "contracts " in the first place. Let the GOM return to the stone age, their rightful place in the new world order.
    3 Jul, 02:08 PM Reply Like
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